With rapid urbanization, urban underground space (UUS) development has become crucial for sustainable urban growth. This paper systematically reviews geological suitability evaluation (GSE) methods for UUS, integrating theoretical frameworks, indicator systems, and assessment techniques. We establish a comprehensive evaluation framework based on environmental strategic assessment (ESA) principles, analyzing key geological factors, including rock/soil properties, hydrogeological conditions, geological hazards, and existing underground structures. The study compares weighting methods (AHP, EWM, CRITIC) and comprehensive evaluation models (FCE, TOPSIS, BNM), highlighting their advantages and application scenarios. A case study of Xiong’an New Area demonstrates how multi-layer UUS planning integrates geological constraints with sustainable development goals. The results show that combining 3D geological modeling with hybrid evaluation methods significantly improves decision-making accuracy. The review provides practical guidance for optimizing UUS utilization while addressing current challenges in indicator selection, weight rationalization, and heterogeneity management.